654 SUPREME COURT REPORTS ANNOTATED

David vs. Construction Industry and Arbitration

Commission G.R. No. 159795. July 30, 2004.*SPOUSES ROBERTO & EVELYN DAVID and COORDINATED GROUP, INC.,petitioners, vs. CONSTRUCTION INDUSTRY AND ARBITRATION COMMISSIONand SPS. NARCISO & AIDA QUIAMBAO, respondents. Actions; Alternative Dispute Resolution; Arbitration; Construction IndustryArbitration Law (E.O. No. 1008); Jurisdiction; E.O. No. 1008 vests on theConstruction Industry Arbitration Commission (CIAC) original and exclusivejurisdiction over disputes arising from or connected with construction contractsentered into by the parties who have agreed to submit their case to voluntaryarbitration.—Executive Order No. 1008 entitled, “Construction Industry ArbitrationLaw” provided for an arbitration mechanism for the speedy resolution ofconstruction disputes other than by court litigation. It recognized the role of theconstruction industry in the country’s economic progress as it utilizes a largesegment of the labor force and contributes substantially to the gross nationalproduct of the country. Thus, E.O. No. 1008 vests on the Construction IndustryArbitration Commission (CIAC) original and exclusive jurisdiction over disputesarising from or connected with construction contracts entered into by parties whohave agreed to submit their case to voluntary arbitration. Section 19 of E.O. No.1008 provides that its arbitral award shall be appealable to the Supreme Court onlyon questions of law. Same; Same; Same; Same; Questions of Law and Questions of Fact; Words andPhrases; There is a question of law when the doubt or difference in a given case arisesas to what the law is on a certain set of facts, and there is a question of fact when thedoubt arises as to the truth or falsity of the alleged facts.—There is a question oflaw when the doubt or difference in a given case arises as to what the law is on acertain set of facts, and there is a question of fact when the doubt arises as to thetruth or falsity of_______________ *SECOND DIVISION. 655 VOL. 435, JULY 30, 2004 65 5 David vs. Construction Industry and Arbitration Commission the alleged facts. Thus, for a question to be one of law, it must not involve anexamination of the probative value of the evidence presented by the parties andthere must be no doubt as to the veracity or falsehood of the facts alleged. Same; Same; Same; Same; Same; The law can be applied only after establishinga factual basis.—At first glance, the issue may appear to be a question of law as itwould call for application of the law on the separate liability of a corporation.However, the law can be applied only after establishing a factual basis, i.e., whetherpetitioner-spouses as corporate officers were grossly negligent in ordering therevisions on the construction plan without the knowledge and consent of therespondent-spouses. On this issue, the Court of Appeals again affirmed the factualfindings of the arbitrator,thus: As a general rule, the officers of a corporation are notpersonally liable for their official acts unless it is shown that they have exceededtheir authority. However, the personal liability of a corporate director, trustee orofficer, along with corporation, may so validly attach when he assents to a patentlyunlawful act of the corporation or for bad faith or gross negligence in directing itsaffairs. Same; Same; Same; Same; Same; Factual findings of construction arbitrators arefinal and conclusive and not reviewable by the Supreme Court on appeal;Exceptions.—The case at bar does not raise any genuine issue of law. We reiteratethe rule that factual findings of construction arbitrators are final and conclusive andnot reviewable by this Court on appeal, except when the petitioner provesaffirmatively that: (1) the award was procured by corruption, fraud or other unduemeans; (2) there was evident partiality or corruption of the arbitrators or of any ofthem; (3) the arbitrators were guilty of misconduct in refusing to postpone thehearing upon sufficient cause shown, or in refusing to hear evidence pertinent andmaterial to the controversy; (4) one or more of the arbitrators were disqualified to actas such under section nine of Republic Act No. 876 and willfully refrained fromdisclosing such disqualifications or of any other misbehavior by which the rights ofany party have been materially prejudiced; or (5) the arbitrators exceeded theirpowers, or so imperfectly executed them, that a mutual, final and definite awardupon the subject matter submitted to them was not made. Petitioners failed to showthat any of these exceptions applies to the case at bar. Same; Same; Same; Same; Same; Rationale for limiting appeal to legal questionsin construction cases resolved through arbitration.—It bears to remind petitioners ofthis Court’s ruling in the 1993 case of Hi-Precision Steel Center, Inc. vs. Lim KimSteel Builders, Inc. which emphasized the rationale for limiting appeal to legalquestions in construction cases resolved through arbitration, thus: x x xConsideration of the animating purpose of voluntary arbitration in general, andarbitration under the 656 6 SUPREME COURT REPORTS56 ANNOTATED David vs. Construction Industry and Arbitration Commission aegis of the CIAC in particular, requires us to apply rigorously the aboveprinciple embodied in Section 19 that the Arbitral Tribunal’s findings of fact shall befinal and inappealable (sic). Voluntary arbitration involves the reference of a disputeto an impartial body, the members of which are chosen by the parties themselves,which parties freely consent in advance to abide by the arbitral award issued afterproceedings where both parties had the opportunity to be heard. The basic objectiveis to provide a speedy and inexpensive method of settling disputes by allowing theparties to avoid the formalities, delay, expense and aggravation which commonlyaccompany ordinary litigation, especially litigation which goes through the entirehierarchy of courts. Executive Order No. 1008 created an arbitration facility to whichthe construction industry in the Philippines can have recourse. The Executive Orderwas enacted to encourage the early and expeditious settlement of disputes in theconstruction industry, a public policy the implementation of which is necessary andimportant for the realization of the national development goals. Aware of theobjective of voluntary arbitration in the labor field, in the construction industry, andin other area for that matter, the Court will not assist one or the other or even bothparties in any effort to subvert or defeat that objective for their private purposes.The Court will not review the factual findings of an arbitral tribunal upon the artfulallegation that such body had “misapprehended facts” and will not pass upon issueswhich are, at bottom, issues of fact, no matter how cleverly disguised they might beas “legal questions.” The parties here had recourse to arbitration and chose thearbitrators themselves; they must have had confidence in such arbitrators. TheCourt will not, therefore, permit the parties to relitigate before it the issues of factspreviously presented and argued before the Arbitral Tribunal, save only where a clearshowing is made that, in reaching its factual conclusions, the Arbitral Tribunalcommitted an error so egregious and hurtful to one party as to constitute a graveabuse of discretion resulting in lack or loss of jurisdiction. Prototypical exampleswould be factual conclusions of the Tribunal which resulted in deprivation of one orthe other party of a fair opportunity to present its position before the ArbitralTribunal, and an award obtained through fraud or the corruption of arbitrators. Anyother more relaxed rule would result in setting at naught the basic objective of avoluntary arbitration and would reduce arbitration to a largely inutile institution.

PETITION for review on certiorari of the decision and resolution of the Court ofAppeals.

The facts are stated in the opinion of the Court.

This is a petition for review on certiorari under Rule 45 of the Revised Rules ofCourt, assailing the Decision and Resolution of the Court of Appeals, dated June 30,2003 and August 27, 2003, respectively, in CA-G.R. SP No. 72736. Petitioner COORDINATED GROUP, INC. (CGI) is a corporation engaged in theconstruction business, with petitioner-spouses ROBERTO and EVELYN DAVID asits President and Treasurer, respectively. The records reveal that on October 7, 1997, respondent-spouses NARCISO andAIDA QUIAMBAO engaged the services of petitioner CGI to design and construct afive-storey concrete office/residential building on their land in Tondo, Manila. TheDesign/Build Contract of the parties provided that: (a) petitioner CGI shall preparethe working drawings for the construction project; (b) respondents shall paypetitioner CGI the sum of Seven Million Three Hundred Nine Thousand EightHundred Twenty-One and 51/100 Pesos (P7,309,821.51) for the construction of thebuilding, including the costs of labor, materials and equipment, and Two HundredThousand Pesos (P200,000.00) for the cost of the design; and (c) the construction ofthe building shall be completed within nine (9) months after securing the buildingpermit. The completion of the construction was initially scheduled on or before July 16,1998 but was extended to November 15, 1998 upon agreement of the parties. Itappears, however, that petitioners failed to follow the specifications and plans aspreviously agreed upon. Respondents demanded the correction of the errors butpetitioners failed to act on their complaint. Consequently, respondents rescinded thecontract on October 31, 1998, after paying 74.84% of the cost of construction. Respondents then engaged the services of another contractor, RRA andAssociates, to inspect the project and assess the actual accomplishment ofpetitioners in the construction of the building. It was found that petitioners revisedand deviated from the structural plan of the building without notice to or approvalby the respondents.1_______________ 1 Respondents’ Complaint before the CIAC; Rollo at pp. 56-65. 658658 SUPREME COURT REPORTS ANNOTATED David vs. Construction Industry and Arbitration CommissionRespondents filed a case for breach of contract against petitioners before theRegional Trial Court (RTC) of Manila. At the pretrial conference, the parties agreedto submit the case for arbitration to the CONSTRUCTION INDUSTRYARBITRATION COMMISSION (CIAC). Respondents filed a request 2 for arbitrationwith the CIAC and nominated Atty. Custodio O. Parlade as arbitrator. Atty. Parladewas appointed by the CIAC as sole arbitrator to resolve the dispute. With theagreement of the parties, Atty. Parlade designated Engr. Loreto C. Aquino to assisthim in assessing the technical aspect of the case. The RTC of Manila then dismissedthe case and transmitted its records to the CIAC.3 After conducting hearings and two (2) ocular inspections of the construction site,the arbitrator rendered judgment against petitioners, thus: “A W A R DIn summary, award is hereby made in favor of the Quiambaos against theRespondents, jointly and severally, as follows:Lost Rentals - P1,680,000.00Cost to Complete, Rectification, etc. - 2,281,028.71Damages due to erroneous staking - 117,000.00Professional fees for geodetic surveys, - 72,500.00etc.Misc. expenses/ professional fees of - 118,642.50engineersBills for water and electricity, PLDT - 15,247.68Attorney’s Fees - 100,000.00Moral Damages - 250,000.00Exemplary Damages - 250,000.00 TOTAL P4,884,418.89 There is likewise an award in favor of the Respondents (petitioners herein) andagainst the Claimants (respondents herein) for the value of the materials andequipment left at (the) site (in) the amount of P238,372.75. Respondent CGI islikewise credited with an 80% accomplishment having a total value of P5,847,857.20. All other claims and counterclaims are hereby dismissed for lack of merit._______________ 2 Id., at p. 55. 3 Order, dated February 14, 2002, Rollo at p. 53. 659 VOL. 435, JULY 30, 2004 659 David vs. Construction Industry and Arbitration CommissionTo Payments already - P5,275,041.00recapitulate: made to CGI Amount awarded - 4,864,418.89 above to Claimants Total: P10,159,459.89 Payments due CGI - P5,847,857.20 for 80% work accomplishment Cost of materials - 238,372.75 and equipment Total: P6,086,299.95Deducting this amount of P6,086,229.95 from P10,159,459.89, the result is a netaward in favor the Claimants of (sic) the amount of P4,073,229.94. WHEREFORE, the Respondents are hereby ordered to pay, jointly and severally,the Claimants the amount of P4,073,229.94 with interest at 6% per annum from thedate of the promulgation of this Award, and 12% per annum of the net award,including accrued interest, from the time it becomes final and executory until it isfully paid. Each party is hereby directed to pay to the Commission P15,000.00 as suchparty’s share in the expert’s fees paid to Engr. Loreto C. Aquino. SO ORDERED.”4Petitioners appealed to the Court of Appeals which affirmed the arbitrator’s Decisionbut deleted the award for lost rentals.5 Unsatisfied, petitioners filed this petition for review on certiorari, raising thefollowing issues:

1. I.THERE WAS NO BASIS, IN FACT AND IN LAW, TO ALLOW

RESPONDENTS TO UNILATERALLY RESCIND THE DESIGN/BUILT CONTRACT, AFTER PETITIONERS HAVE (SIC) SUBSTANTIALLY PERFORMED THEIR OBLIGATION UNDER THE SAID CONTRACT. 2. II.THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONERS JOINTLY AND SEVERALLY LIABLE WITH CO-

Associate Justices Cancio C. Garcia and Eliezer R. De Los Santos; Rollo at pp. 29-50. 660660 SUPREME COURT REPORTS ANNOTATED David vs. Construction Industry and Arbitration CommissionPETITIONER COORDINATED (GROUP, INC.), IN CLEAR VIOLATION OF THEDOCTRINE OF SEPARATE JURIDICAL PERSONALITY. We find no merit in the petition. Executive Order No. 1008 entitled, “Construction Industry Arbitration Law”provided for an arbitration mechanism for the speedy resolution of constructiondisputes other than by court litigation. It recognized the role of the constructionindustry in the country’s economic progress as it utilizes a large segment of the laborforce and contributes substantially to the gross national product of thecountry.6 Thus, E.O. No. 1008 vests on the Construction Industry ArbitrationCommission (CIAC) original and exclusive jurisdiction over disputes arising from orconnected with construction contracts entered into by parties who have agreed tosubmit their case to voluntary arbitration. Section 19 of E.O. No. 1008 provides thatits arbitral award shall be appealable to the Supreme Court only on questions oflaw.7 There is a question of law when the doubt or difference in a given case arises as towhat the law is on a certain set of facts, and there is a question of factwhen thedoubt arises as to the truth or falsity of the alleged facts. 8 Thus, for a question to beone of law, it must not involve an examination of the probative value of the evidencepresented by the parties and there must be no doubt as to the veracity or falsehoodof the facts alleged.9 In the case at bar, it is readily apparent that petitioners are raising questions offact. In their first assigned error, petitioners claim that at the time of rescission,they had completed 80% of the construction work and still have 15 days to finish theproject. They likewise insist that they constructed the building in accordance withthe contract and any modification on the plan was with the consent of therespondents._______________ 6 See Whereas Clauses & Section 2 (Declaration of Policy) of E.O. 1008. 7 SC Circular No. 1-91 and Revised Administrative Circular No. 1-95 provides

that appeal from the arbitral award of the CIAC must first be brought to the Courtof Appeals on questions of fact, law or mixed questions of fact and law. 8 Serna vs. Court of Appeals, 308 SCRA 527 (1999). 9 Palon vs. Nino, 353 SCRA 204 (2001).

661 VOL. 435, JULY 30, 2004 661 David vs. Construction Industry and Arbitration CommissionThese claims of petitioners are refuted by the evidence on record. In holding thatrespondents were justified in rescinding the contract, the Court of Appeals upheldthe factual findings of the sole arbitrator, thus:xxx (A)s the Building was taking shape, they noticed deviations from theapproved plans and specifications for the Building. Most noticeable weretwo (2) concrete columns in the middle of the basement which effectivelyand permanently obstructed the basement for the parking of vehicles x x x.In addition, three (3) additional concrete columns were constructed fromthe ground floor to the roof deck x x x which affected the overall dimensionof the building such as altering the specified beam depths, passagewaysand windows.In addition, Mrs. Quiambao provided a virtual litany of allegeddefects, to wit: (a) the Building was not vertically plumbed x x x; (b) provisions formany architectural members were not provided for, such as, (i) the recesses forwindow plant boxes are lacking x x x, (ii) provisions for precast molding are lacking xx x, (iii) canopies are also lacking x x x; (c) misaligned walls, ugly discrepancies andgaps; (d) skewed walls to floors/landings; (e) low head clearances and truncatedbeams x x x; (f) narrow and disproportionate stairs x x x one (1) instead of two (2)windows at the fire exit x x x, (g) absence of water-proofing along the basement wallx x x and at the roof deck which caused leaks that damages the mezzanine floor x xx; (h) the use of smaller diagonal steel trusses at the penthouse. x x x There wereothers which were shown during the site inspection such as: (1) L-shaped kitchencounters instead of the required U-shaped counters x x x; (2) failure to providemarble tops for the kitchen counters; (3) installation of single-tub sinks where theplans called for double-type stainless kitchen sinks x x x; (4) installation of muchsmaller windows than those required; (5) misaligned window easements to wall, (6)floors were damaged by roof leaks, (6) poor floor finish, misaligned tiles, floors with“kapak” and disproportionate drawers and cabinets. A more comprehensive list ofalleged defects, deviations and complaints of the Quiambaos is found in a reportmarked Exhibit C-144. Many of these defects were seen during the siteinspection and the only defense and comment of CGI was that these werepunch-list items which could have been corrected prior to completion andturn-over of the Building had the Contract not been terminated by theClaimants (respondents here). x x x Thus, x x x (petitioner) CGI argued that: “Inany construction work, before a contractor turns-over the project to the owner,punchlisting of defects is done so as to ensure compliance and satisfaction of both thecontractor and the owner. Punch listing means that the contractor will list all majorand minor defects and rectifies them before the turnover of the project to the owner.After all defects had 662662 SUPREME COURT REPORTS ANNOTATED David vs. Construction Industry and Arbitration Commissionbeen arranged, the project is now turned over to the owner. For this particular project,no turn over was made by the contractor to the owner yet. Actually, we were alreadypinpointing these defects for punch listing before we were terminated illegally. Asalleged by the owner, the deficiencies mentioned are stubouts of water closets attoilets, roofing and framing, doors, cabinets, ceiling and stairs and other were not yetcompleted and rectified by us. In fact we were counting on our project engineer incharge x x x to do this in as much as this is one of his duties to do for the company. x xx”Confirmatory of this assertion of CGI that it was willing to undertake theappropriate corrective works (whether or not the items are punch-list items) isExhibit “C-88” which is a letter prepared by CGI’s Windell F. Vizconde, checked byCGI’s Gary M. Garcia and noted by CGI’s Benjie Lipardo, addressed to theQuiambaos which stated that: “As per our discussion during the last meeting dated Sept. 28, 1998 the followingitems was (sic) confirmed and clarified. These are described as follows:

1. “1.All ceiling cornices shall be installed as per plan specification which is 1” x

4” in size. 2. “2.All baseboards shall be installed as per plan specification which is wood 1” x 4” in size. 3. “3.Electrical Meter center and main panel breaker should be retained to its present location. 4. “4.Elevation of office, dining and stair lobby of ground floor shall be 4” higher than the elevation of parking area (subject for verification). 5. “5.All door jambs at C.R. has (sic) to be replaced with concrete framing jambs. 6. “6.All ceilings mailers should be 2 x 2 in size. 7. “7.All plywood ceiling that was damaged by rain water shall be replaced. 8. “8.Provide a pipe chase for the enclosure of soil stack pipe and water line pipe at the ground floor level between grid line 3-4 along the light well area. 9. “9.Front side elevation view shall be follow (sic) as per plan specialy (sic) at 4th flr. 10. “10.One column at basement floor along grid line 2# B has to be verified by the structural designer if ever it is safe to removed (sic) the column and what will be their (sic) recommendation to support the load. 11. “11.Existing doors D-2 and D-3 shall be replaced a (sic) new one.”

While Mrs. Quiambao appeared not to have given her conformity, this documentfrom CGI is an admission by CGI of the deficiencies in the construction ofthe Building which needed to be corrected. 663 VOL. 435, JULY 30, 2004 663 David vs. Construction Industry and Arbitration CommissionIt appears that concrete samples taken from the basement, ground floor,mezzanine and 2nd floor of the Building were subjected to a concrete coretest by Geotesting International, Inc., geotechnical and materials testingengineers. A report dated January 20, 1999 x x x showed x x x that (5) samples x xx failed the test. Sample S2 while it showed a comprehensive strength of 3147 psi,the corrective strength in psi was below the specified comprehensive strength of3000 psi. CGI failed to produce evidence of similar tests during the construction ofthe Building although it is normal construction practice for the contractor to providesamples for concrete core tests. Deformed reinforcing steel bar specimens from the building weresubjected to physical tests. These tests were conducted at the Materials TestingLaboratory of the Department of Civil Engineering, College of Engineering,University of the Philippines. x x x There were 18 samples and x x x 8 failed thetest although all of them passed the cold bend test. x x x CGI submitted QualityTest Certificates issued by Steel Asia certifying to the mechanical test results andchemical composition of the steel materials tested x x x. However, the samples wereprovided by the manufacturer, not by CGI, to Steel Asia, and there is no showingthat the materials supplied by the manufacturer to CGI for the Building formed partof the steel materials, part of which was tested. xxx Regarding the additional columns at the basement and at the first floorto the roof deck of the Building, which effectively restricted the use of thebasement as a parking area, and likewise reduced the area which could beused by the Quiambaos in the different floors of the Building, Engr.Roberto J. David admitted that these represented a design change whichwas made and implemented by CGI without the conformity of theClaimants. The Contract specifically provided in Article II that “the CONTRACTORshall submit to the OWNER all designs for the OWNER’S approval.” This impliesnecessarily that all changes in the approved design shall likewise be submitted tothe OWNER for approval. This change, in my view, is the single most seriousbreach of the Contract committed by CGI which justified the decision ofthe Claimants to terminate the Contract. x x x (T)here is no evidence to showthat the Quiambaos approved the revision of the structural plans to provide for theconstruction of the additional columns. x x x x x x Engr. Villaseñor defended his structural design as adequate. He admittedthat the revision of the plans which resulted in the construction ofadditional columns was in pursuance of the request of Engr. David torevise the structural plans to provide for a significant reduction of the costof construction. When Engr. David was asked for the justification for therevision for the plans, 664664 SUPREME COURT REPORTS ANNOTATED David vs. Construction Industry and Arbitration Commissionhe confirmed that he wanted to reduce the cost of construction. In anycase, whether the cause of revision of the plans was the under-design of thefoundation or for reasons of economy, it is CGI which is at fault. CGIprepared the structural plans and quoted the price for constructing theBuilding. The Quiambaos accepted both the plans and the price. If CGImade a mistake in designing the foundation or in estimating the cost ofconstruction, it was at fault. It cannot correct that mistake by revising theplans and implementing the revisions without informing the Quiambaosand obtaining their unequivocal approval of such changes. In addition, CGI admitted that no relocation survey was made by it prior to theconstruction of the Building. Consequently, a one-meter portion of the Building wasconstructed beyond the property line. In justification, Engr. Barba V. Santosdeclared that CGI made the layout of the proposed structure based on the existingfence. x x x (I)t is understood that a contractor, in constructing a building, must firstconduct a relocation survey before construction precisely to avoid the situation whichdeveloped here, that the Building was not properly constructed within the owner’sproperty line. x x x This resulted in the under-utilization of the property, small as itis, and the exposure of the Quiambaos to substantial damages to the owner of theadjoining property encroached upon. A third major contested issue concerned the construction of the cistern.x x x A cistern is an underground tank used to collect water for drinkingpurposes. The contentious points regarding the construction of the cistern are: first,that the cistern was designed to accumulate up to 10,000 gallons of water;as constructed, its capacity was less than the design capacity. Second, thereis no internal partition separating the cistern from the sump pit. x x x Considering that the cistern is a receptacle for the collection of drinkingwater, it is incomprehensible why the Respondents (herein petitioners), inthe design and construction of the cistern, has (sic) not taken the necessarymeasures to make certain that the water in the cistern will be free fromcontamination. x x x Thus, granting the arguments of the Respondents (herein petitioners) that theobserved defects in the Building could be corrected before turn-over and acceptanceof the Building if CGI had been allowed to complete its construction,the construction of additional columns, the construction of the Buildingsuch that part of it is outside the property line established a sufficient legaland factual basis for the decision of the Quiambaos to terminate theContract. The fact that five (5) of nine (9) the (sic) concrete samplessubjected to a core test, and eight (8) of eighteen (18) deformed reinforcingsteel bar specifics subjected to physical tests failed the tests and the under-design of the cistern was established after the Contract was 665 VOL. 435, JULY 30, 2004 665 David vs. Construction Industry and Arbitration Commissionterminated also served to confirm the justified suspicion of the Quiambaosthat the Building was defective or was not constructed according toapproved plans and specifications.10 (emphases supplied)These are technical findings of fact made by expert witnesses and affirmed by thearbitrator. They were also affirmed by the Court of Appeals. We find no reason torevise them. The second assigned error likewise involves a question of fact. It is contended thatpetitioner-spouses David cannot be held jointly and severally liable with petitionerCGI in the payment of the arbitral award as they are merely its corporate officers. At first glance, the issue may appear to be a question of law as it would call forapplication of the law on the separate liability of a corporation. However, the law canbe applied only after establishing a factual basis, i.e., whether petitioner-spouses ascorporate officers were grossly negligent in ordering the revisions on theconstruction plan without the knowledge and consent of the respondent-spouses. Onthis issue, the Court of Appeals again affirmed the factual findings of thearbitrator, thus:As a general rule, the officers of a corporation are not personally liable for theirofficial acts unless it is shown that they have exceeded their authority. However, thepersonal liability of a corporate director, trustee or officer, along withcorporation, may so validly attach when he assents to a patently unlawfulact of the corporation or for bad faith or gross negligence in directing itsaffairs. The following findings of public respondent (CIAC) would support its ruling inholding petitioners severally and jointly liable with the Corporation:“x x x When asked whether the Building was underdesigned considering the poorquality of the soil, Engr. Villasenor defended his structural design as adequate. Headmitted that the revision of the plans which resulted in the construction ofadditional columns was in pursuance of the request of Engr. David torevise the structural plans to provide for a significant reduction of the costof construction. When Engr. David was asked for the justification for therevision of the plans, he con-_______________ 10 Rollo at pp. 78-83. 666666 SUPREME COURT REPORTS ANNOTATED David vs. Construction Industry and Arbitration Commissionfirmed that he wanted to reduce the cost of construction. x x x” (emphasessupplied)11Clearly, the case at bar does not raise any genuine issue of law. We reiterate the rulethat factual findings of construction arbitrators are final and conclusive and notreviewable by this Court on appeal, except when the petitioner proves affirmativelythat: (1) the award was procured by corruption, fraud or other undue means; (2)there was evident partiality or corruption of the arbitrators or of any of them; (3) thearbitrators were guilty of misconduct in refusing to postpone the hearing uponsufficient cause shown, or in refusing to hear evidence pertinent and material to thecontroversy; (4) one or more of the arbitrators were disqualified to act as such undersection nine of Republic Act No. 876 and willfully refrained from disclosing suchdisqualifications or of any other misbehavior by which the rights of any party havebeen materially prejudiced; or (5) the arbitrators exceeded their powers, or soimperfectly executed them, that a mutual, final and definite award upon the subjectmatter submitted to them was not made.12 Petitioners failed to show that any of theseexceptions applies to the case at bar. Finally, it bears to remind petitioners of this Court’s ruling in the 1993 case of Hi-Precision Steel Center, Inc. vs. Lim Kim Steel Builders, Inc. 13 which emphasized therationale for limiting appeal to legal questions in construction cases resolvedthrough arbitration, thus:x x x Consideration of the animating purpose of voluntary arbitration in general, andarbitration under the aegis of the CIAC in particular, requires us to apply rigorouslythe above principle embodied in Section 19 that the Arbitral Tribunal’s findings offact shall be final and inappealable (sic). Voluntary arbitration involves the reference of a dispute to an impartial body, themembers of which are chosen by the parties themselves, which parties freely consentin advance to abide by the arbitral award issued after proceedings where bothparties had the opportunity to be heard. The basic objective is to provide aspeedy and inexpensive_______________ 11 Court of Appeals Decision, Rollo at pp. 49-50. 12 Section 24, Republic Act No. 876. 13 228 SCRA 397 (1993), penned by former Associate Justice Florenino P.Feliciano. 667 VOL. 435, JULY 30, 2004 667 David vs. Construction Industry and Arbitration Commissionmethod of settling disputes by allowing the parties to avoid the formalities,delay, expense and aggravation which commonly accompany ordinarylitigation, especially litigation which goes through the entire hierarchy ofcourts. Executive Order No. 1008 created an arbitration facility to which theconstruction industry in the Philippines can have recourse. The Executive Order wasenacted to encourage the early and expeditious settlement of disputes in theconstruction industry, a public policy the implementation of which is necessary andimportant for the realization of the national development goals. Aware of the objective of voluntary arbitration in the labor field, in theconstruction industry, and in other area for that matter, the Court will not assist oneor the other or even both parties in any effort to subvert or defeat that objective fortheir private purposes. The Court will not review the factual findings of an arbitraltribunal upon the artful allegation that such body had “misapprehended facts” andwill not pass upon issues which are, at bottom, issues of fact, no matter how cleverlydisguised they might be as “legal questions.” The parties here had recourse toarbitration and chose the arbitrators themselves; they must have had confidence insuch arbitrators. The Court will not, therefore, permit the parties torelitigate before it the issues of facts previously presented and arguedbefore the Arbitral Tribunal, save only where a clear showing is made that,in reaching its factual conclusions, the Arbitral Tribunal committed anerror so egregious and hurtful to one party as to constitute a grave abuseof discretion resulting in lack or loss of jurisdiction.Prototypical exampleswould be factual conclusions of the Tribunal which resulted in deprivation of one orthe other party of a fair opportunity to present its position before the ArbitralTribunal, and an award obtained through fraud or the corruption of arbitrators. Anyother more relaxed rule would result in setting at naught the basicobjective of a voluntary arbitration and would reduce arbitration to alargely inutile institution. (emphases supplied)IN VIEW WHEREOF, the petition is DISMISSED for lack of merit. Costs againstpetitioners. SO ORDERED. Austria-Martinez, Callejo, Sr., Tinga and Chico-Nazario, JJ., concur.